Amid a swirl of media reports asking if Nokia is minded to adopt the Android operating system for future smartphones, Chief Executive Stephen Elop had a crisp and clear message for investors: Windows Phones are doing just fine, thank you.

Mr. Elop, who is struggling to turn around the Finnish handset giant, announced Thursday that fourth quarter results are trending better than expected as sales of the new Lumia are brisk and performance at a wireless network joint venture with Siemens has turned the corner. He even said the company would sell more Lumias if it could simply find the means to make more.

Shares spiked significantly, but investors have seen this movie before…

Oh dear. Just when you thought there couldn’t be more bad news for Nokia, more comes along.

Research firm Gartner said Wednesday Nokia “had a particularly bad quarter with smartphone sales and it tumbled to the No. 7 worldwide position with 7.2 million smartphones sold in the third quarter,” the research group said. That’s a hefty fall from its third-place ranking last quarter and comes even as global sales of smartphones jumped 47% in the third quarter.

The main beneficiaries, though, were Apple and Samsung.

Nokia Chief Executive Stephen Elop, speaking on the sidelines of the annual Morgan Stanley TMT shindig in Barcelona, said: “We still have a lot of work ahead.”

He has high hopes, though, that the Finnish company’s new Lumia smartphones will woo new customers. “We’re bringing a beautiful product to market,” he said. “Lumia reviews, customer comments have been fantastic.”

While Lumia smartphones are always in the spotlight when talking about Nokia, the lower-end Asha line of mobile phones was the star of the show Thursday, when the Finnish mobile phone maker posted its sixth consecutive quarterly loss.

Despite the fact that losses continue to mount at the firm, the better-than-expected performance of Nokia’s feature phone range provided some relief to markets and shares traded higher after the release of the report. Nokia sold 76.6 million feature phones in the third quarter. While that is a decline from 89.8 million a year ago, it is nowhere near the 63% fall in sales of Nokia’s smartphones over the same period.

Analysts also noted a strong performance from Nokia Siemens Networks, the joint venture mobile networks provider, with one analyst saying NSN’s result was “incredible.”

But it will take more than Asha and NSN to stop the Nokia ship from sinking.

It has meant that Nokia, which hasn’t been successfully making high-end smartphones for a while now, needs not only to re-establish its brand, but to simultaneously promote a mobile platform that is less established than its rivals.

“Nokia is fully leveraged to the success with consumers of Windows as a mobile ecosystem,” Bernstein analyst Pierre Ferragu noted following Nokia’s profit warning last week.

“But all our research indicates clearly that today’s consumer interest for Windows-based phones is very weak,” he added.

Just when it looked like its life-support system was about to be switched off, Nokia’s has a Lazarus moment and its punch-drunk shares spring back to life.

Down by 45% since the now-infamous “Burning Platform” memo from CEO Stephen Elop and the February announcement of a tie-up with Microsoft, Nokia shares surged more than 10% Thursday despite reporting a second consecutive quarterly net loss and a drop in revenue.

The big surprise–and Nokia’s saving grace–came from lowly feature phones, now the backbone of Nokia’s business where volumes grew to 89.8 million units, up 8% from last year’s quarter but crucially up 25% from the three months to June.

The switch away from Symbian, its long-time operating system, was expected to result in a huge drop-off in business after what happened in the second quarter, when sales and volumes both fell sharply. But reading Nokia its last rites seems to have been a little premature.

Troubled Finland-based handset maker Nokia is going through some very tough times, as forecast by its Chief Executive Stephen Elop earlier this year, in making the transition from a smartphone maker with an outdated Symbian platform to take on Microsoft’s Windows Phone platform.

Still, one shouldn’t mistake this for a company fighting first for survival, but rather an enterprise looking ahead making changes to its structure to better reflect where the profitable growth and revenues are.

Nokia said in April it plans to reduce its global workforce by about 4,000 research and development jobs in Denmark, the U.K. and Finland by the end of 2012. Thursday’s announcement means the additional closure of its low-end feature phone manufacturing plant in Cluj, Romania, by the end 2011 and the transfer of manufacturing to Asian factories to be closer to key markets.

“Nokia is not really cutting down because of costs the way that for instance Motorola and Sony Ericsson have done when times were tough. This is about realigning their business and looking at where they need their people and where they don’t,” said Research Vice President Carolina Milanesi at market-research firm Gartner Inc.

With Nokia’s second quarter results out of the way and little significant progress expected by the next quarter, the focus once again shifts to just when will the company ship its first Windows-based device.

Chief Executive Stephen Elop on Thursday repeated that he expects the first such device to ship in the fourth quarter this year, with multiple launches to follow in 2012, while noting “clear signals” of support for its Windows Phone strategy.

In the meantime, though, there’s no compelling reason for investors to buy into Nokia in what industry expert Geoff Blaber, at research firm CCS Insight, calls a “sustained absence of new smartphones.”

Indeed, to stand any chance of getting its competitive edge back against Apple and Samsung, and all the vendors cranking out swanky new Android phones, one new Windows Phone in the top-end price segment isn’t going to cut it.

A question asked by a Nokia shop steward to a Nokia Corp. executive on a TV talk-show in Finland on Thursday quite neatly summed up current morale and uncertainty among the company’s engineers: would it be wise for us developers to start specializing on the Windows Phone operating system? The answer: too early to tell.

Nokia, the world’s largest maker of mobile handsets, which last week announced a tie-up with Microsoft Corp. as part of a major shift in strategy, will see numerous job cuts. The company said it will use Microsoft’s Windows Phone as its main smartphone platform, cutting research and development in its own platform, Symbian, which has struggled to compete with more consumer-driven rivals like Apple Inc.’s iPhone and smartphones based on Google Inc.’s Android platform.

Over the weekend, persons familiar with the situation told The Wall Street Journal that several senior Nokia managers are expected to leave the company as part of new CEO Stephen Elop’s plans to revamp the company’s strategy.

Nokia has hired executive recruiters to find a new head of operating systems and a new head of R&D, one person said, while another said the company has also started the search for a new head of its North American business. Exactly who would leave the board remains unclear, as executives themselves won’t be briefed until a day before the company’s strategy update on February 11, the persons said.

There is no doubt that Stephen Elop, who took the helm at Nokia last autumn, has a mandate for radical change. Analysts and investors expect the company to announce far-reaching adjustments to its current strategy as it strives to fight back against its fast-growing rivals.

The Finnish company’s share price has been dropping for the past several quarters, matching a decline in its position in the premium smartphone market. But Nokia Thursday beat expectations on its third-quarter earnings and gave a cheerful outlook for the rest of the year.

While strong sales of older smartphones like the E72 full-keyboard device boosted Nokia’s selling price and profits in the past quarter, the company has only just begun to ship its new range of devices based on the upgraded Symbian 3 platform, including the flagship phone N8.